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Short-Run Shutdown Price Explained by Noor Nabi is a document available to read on EtoBox.

1) The shutdown price is the minimum price a business needs to justify remaining in the market in the short run. It is the price where total revenue equals total variable costs. 2) If price is below average variable costs, the firm is not covering its variable costs and should shut down immediately. 3) If price equals average variable costs, the firm can remain in business since it is covering variable costs, even if it is making losses in the short run by not covering fixed costs.

Author

Noor Nabi

Language

EN